Why Don’t Gartner or IDC Lead in Analytics?

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    In a recent Gartner report on why vendors need to market their products, what fascinated me was that Gartner gave a pretty high score for the importance of white papers as marketing tools when Dataquest, the firm it acquired years ago, showcased in an earlier study that nobody trusts white papers.

    The Gartner Report Problem

    Now the reason behind the public nature of the report is that it drives Gartner services. I have no problem with a firm marketing in this way, but the study should then be treated less as a Gartner study and more like any vendor that does a study that suggests you should buy its products, with a big grain of salt. But I can’t really disagree with the results (other than the white paper thing) because I would likely conclude similarly. In fact, anyone with any marketing background would conclude similarly. I know this because when I was in IBM, I read an internal report that mirrored this one. The problem is that it isn’t really actionable because it isn’t very granular. And I’d think a company of the size and scope of Gartner could do better than I, or an internal resource, could do. So why doesn’t it? The problem is our understanding of analytics.

    What Is Analytics?

    I’ve seen this with past technology changes. People, including most analysts and technology executives, initially toss around the name of the new class of products like they know what they are talking about, but they don’t. They are simply repeating the word. I recall Larry Ellison getting up on stage, frustrated with the term “the cloud,” pointing out that it was basically a spin on outsourced hosting. Which, as it is normally considered and in line with Amazon Web Services, it actually is. What made “the cloud” interesting wasn’t initially the server hardware or software, it was the engagement model. It provided a path to provisioning and charging that was far easier than other earlier models.

    This was like looking at the iPod, which was a Walkman with a hard drive, rather than a CD or cassette tape, and thinking it was about the hardware or software. It was about the ease of taking music that wasn’t portable and making it portable. While the iPod was a different spin on an MP3 player, the important part was the user experience, not the hardware or software. You needed the latter to get to the former, but if you didn’t get what was important, you’d never get a competing product right. Zune came closest; the rest were even more of a joke.

    So what is analytics? It is automated analysis. It is a concept that is rapidly evolving with IBM’s Watson as the most advanced component currently in market. Watson is basically an analyst in a box. There are three parts to a successful analytics project, either batch or real time. One is data acquisition, second is analysis, and third is interpretation of the results. The first two components can be increasingly automated. The last requires a person and it is this component that Watson is focused on.

    Put differently, analytics is like a spreadsheet with pivot tables on steroids. The reason you use analytics is because, implemented properly, it takes a ton of labor out of in-depth analysis.

    So why, particularly in a study like the one that started this column, don’t Gartner or IDC, or most of the internal customer satisfaction, market analysis, or financial analysts use analytics? I could include most technology companies as well. Even those that sell analytics products don’t use the technology as broadly as they could.

    Why Analytics Isn’t Used

    I think it comes down to three reasons. A lack of understanding of the tools themselves is likely at the top of the list. Folks currently doing analysis jobs didn’t have analytics tools when they were in school and learned to do their jobs using something else. Long after Lotus 1-2-3 came out, most accountants were still using calculators or batch computer systems because they didn’t understand spreadsheets and/or didn’t want to learn a new tool. No one wants to look stupid or drive a process that makes them look obsolete.

    Number two is budget. Analytics products are a small portion of the expense of implementing an analytics solution. Much of the cost is in setting up the sample pools and designing the analytical process. Granted, over time the increased accuracy and automation should make the strategic value of the solution a no-brainer, but companies and executives are forced to live within quarters and that makes thinking and acting strategically very difficult.

    Finally, the benefits of analytics products aren’t communicated well. Firms that implement these tools often find they create a massive competitive advantage, which means they don’t really want to share what that advantage is. They’d just as soon their competitors not go down this path. Done right, analytics results in actionable information, which can massively transform a firm into something that is far more responsive and successful. EMC, for instance, which uses analytics heavily to optimize products and services, develop strategies, and assure customer loyalty, was shocked at how much that use improved its bottom line and competitiveness. It actually got swamped by customers who, upon learning of this effort, wanted EMC to sell them something similar.

    Wrapping Up: Why Doesn’t Gartner Use Analytics?

    Once, when I worked for a large firm, I went for a drive with the head of research. During that drive, I asked who the idiot was who picked our phone system. I had been the competitive analyst that studied that system and it was total crap. Unfortunately for me, it was that head of research who made that choice. (Under “things to do to enhance your analyst career,” this falls in the “avoid at all costs” column.)

    This little story showcases how decisions are often made in analyst firms. The folks that make the decisions don’t actually talk to the analysts. I’m very sure Gartner has analysts who could suggest how analytics could transform Gartner’s Research Notes and Reports into far more valuable products, but they are likely not being asked, and if they volunteer the information they are likely seen as troublemakers.

    Here is a suggestion. Next time you meet with an analyst firm and the analyst gives you a recommendation of a product you could use, like analytics, ask them what they use and why their firm doesn’t listen to their analyst’s advice. Personally, I think analyst firms should be showcases for the capabilities of their analysts. Your questions could go a long way toward making that happen. It would also result in better answers because they’d feel the mistakes they make personally and become better analysts, and analyst firms, as a result.

    Rob Enderle
    Rob Enderle
    As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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